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Don’t Be a Hero

Jamie Seckington

WHEN I WAS A KID, my father would take me trout fishing at the many small lakes of California’s Eastern Sierra mountains. We’d usually “fish off the bottom” using a wad of floating bait attached to a weighted line. We’d then sit on a rock or in our little rowboat, and wait for a fish to come along and take the bait.

It seemed to me that some mornings we waited an awful long time. If I didn’t get a bite within five minutes, I’d reel in my line and cast out again. Oftentimes, after reeling in, the hook at the end would be covered in moss and the bait gone, having been ripped off as the line passed through the mossy lake bottom. I’d need to rebait the hook before casting out again. Once I had baited the hook again, I would repeat the process: cast, wait five minutes and—assuming there was no bite—reel in.

While I was busy fiddling with my bait and hook every five minutes, my dad just sat there with his line in the water. He gazed at the glassy lake surface, up at the blue sky, at the waterfall feeding the lake. He seemed at peace. Then suddenly—bam—a fish would strike his bait, shattering the serenity of the scene.

My dad almost always caught a fish before me—and then another and another. “How could this be?” I thought to myself. “Surely there must be more to it than just sitting there?”

Of course, as I’d learn years later, there was more to it. My dad possessed a fishing skill I lacked: patience. He was willing to be still and wait. He didn’t frantically chase after fish he couldn’t see. Rather, he cast his line and then waited for the fish to come to him. He was content to wait. In the long run, it was a winning strategy.

While my dad and I were both trying to catch fish, we weren’t doing the same thing. We were using the same equipment, going after the same species of fish and dropping our lines in the same lake. But our methods differed greatly. This difference ultimately affected our results. My dad would catch two fish for every one that I caught.

As a fisherman, my dad had faith in the process. He had confidence in his proven technique, one that had succeeded for decades. He was content to wait. Of course, some weekends, the fish just weren’t biting. It was disappointing, to be sure, but my dad didn’t rush out and buy new gear, nor did he abandon the holes he’d been fishing for years in favor of better” spots, and he certainly didn’t quit fishing all together. Instead, he simply made plans for another fishing trip in a few weeks’ time.

Today, I approach investing in much the same way that my dad approached fishing—that is, passively. I own and continue to contribute to a few globally diversified index funds. While I occasionally rebalance my portfolio, I don’t move in and out of the market. Put another way, I leave my line in the water.

The Oxford Dictionary defines passive as “accepting or allowing what happens or what others do, without active response or resistance.” In other words, to be passive is to go with the flow. Yet one can be passive and still possess intent.

My dad’s intent was to catch fish. My intent as an investor is to enlarge my portfolio. While passively pursued, both activities have a goal in mind.

But the notion that we can passively attain our goals is alien to Western ears. We prefer men of action with elaborate plans, colorful maps and a rugged, individual genius that sets them apart from the herd. We idolize the active man, while disparaging passivity as feminine and somehow lacking the right stuff.

We also find it difficult to fathom how we can possibly reach a goal without taking on a great deal of risk and while expending only modest effort. Such a strategy doesn’t strike us as particularly heroic.

It isn’t.

Passive investing through an index fund is not about being a hero. It’s not about beating the market or impressing our peers with some genius market move that happened to work this year. Rather, it’s about reaching our financial goals by simply matching the market’s return with as little risk and effort as possible.

Let the heroes risk life and limb in their quest for glory. I’d rather be fishing.

Jamie Seckington grew up on the beaches of Southern California listening to punk rock and raging against the machine. Decades later, he now lives a quiet life in north Idaho and reads HumbleDollar regularly. He has learned to appreciate the many ironies that life offers. Jamie’s previous articles were Where’s the Value and Testing My Faith.

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